When You Should Not Enforce a Trademark

Your small business' identity means a lot to your bottom line. But when another entity infringes on your trademark, it may not always make good business sense to pursue a legal enforcement action.

Trademark enforcement actions can be costly, and may not be worth the potential benefits, one trademark expert writes for Inc. magazine. Suing for trademark infringement may also be damaging to your reputation in some cases.

Here are some real-world examples of when trademark enforcement actions may not be worth your while:

Too Costly. A simple cease-and-desist notice can oftentimes be cheap and effective. But if a trademark enforcement case makes it all the way to court, it could cost you hundreds of thousands of dollars or more, the Inc. columnist warns. Case in point: The University of Alabama has spent nearly $1.4 million in a trademark case against an artist who paints Alabama football scenes, The Wall Street Journal reports. The case, still pending, has been going on for seven years.

Not Much Benefit. A cost-benefit analysis may suggest your trademark enforcement case isn't worth pursuing. The Inc. columnist suggests asking yourself some questions like: Will you be able to recapture lost sales from the alleged infringer? And, will you be able to stop your brand from being diluted or tarnished?

Consider the Consequences. Doggedly enforcing your trademark can sometimes sour your relationship with your clients and the wider community. For example, consider the Baltimore cafe owner who trademarked the word "Hon" -- a local term of endearment -- and then threatened legal action against anyone who used "Hon" on souvenirs. Locals boycotted her business until the woman gave up her trademark and made a tearful apology on national TV.

Finally, a word of caution: Deciding not to enforce a trademark can lead to potential adverse legal consequences. A failure to assert your trademark rights may result in accusations that you waived your right to sue, or even consented to infringement. That's why it may be wise to consult a trademark attorney about the best way to defend your rights in an infringement case.